The Perils of Pension Reform

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In 2012, pension reform has become the poster child for those railing against out-of-control government spending.

The clamoring has reached an even louder pitch with a bill introduced by Assemblyman
Donald Wagner (R-Irvine), which would cap public pensions at $100,000 annually.

Wagner and others have reason for concern.

Today, more than 12,000 retired public servants receive annual pensions in excess of $100,000, compared with 1,900 who collected the same amount in 2005. Of course, inflation enters into the picture, but that much? Surely not.

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So why not move forward with the proposal?

Like a lot of simple ideas, the problem Wagner seeks to address is not so simple.

Some civil servants--notably public safety personnel, are in high-stress positions, and often retire with the possibility of shortened lives because of their jobs.

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Judges, physicians and other specialists often give up opportunities to earn five to ten times as much pay in the private sector. University researchers often choose the academic environment to share their knowledge with students instead of corporations, where they would be compensated at a much higher rate.

For these public employees, $100,000 may be a huge come-down from the retirement they would have earned elsewhere.

The fact is, determining retirement limits is not a one-size-fits-all proposition.

Still, the pension issue must be addressed, but with a political scalpel rather than a cleaver. Two reasonable changes:

Move up retirement ages and years on the job.

If those in stressful vocations can no longer perform, they should retire at a lower percentage than full retirement and begin new careers.

End double dipping.

There is something patently wrong about an individual who retires with a large pension after thirty years and then works in another public position long enough--usually five years--to collect another, separate pension as if he or she never had the first one.

Some people look at public employees as people who are one step away from welfare recipients.

Their thinking is the only reason people work for government is because they can't get a "real" job. These critics should try to teach a class, break up a riot, or resolve the issues related to a complicated case before the courts.

They might reconsider.

We do need pension reform, but in a way that these retirement benefits modified rather than trivialized.

If we go too far just for the sake of cutting costs, we may also discourage people from working in valued positions of government.

We might save some money in the short term, but we could cripple the state's capabilities in the long term.